M&E industry expected to rebound by FY22: KPMG Report

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September 30, 2020 4:52 PM

Digital advertising spends are now set to overtake those on TV by FY21

KPMG in India’s M&E report 2020 ‘A year off script: Time for resilience’ examined the performance of the M&E sector during the challenging period.

The Indian media and entertainment industry (M&E) which has been significantly impacted by the lockdown, is expected to recover to its current levels and post a 33% growth in FY22 to reach Rs 1,866 billion (following a contraction of 20 per cent in FY21), a study conducted by KPMG revealed. This still implies a loss of around two years of growth. Titled ‘A year off script: Time for resilience’, the report examined the performance of the M&E sector during a particularly challenging period.

The report also stated that the two areas that offer encouragement are the continued economic growth of Bharat and the universal acceleration of digital adoption among users across geographies and SECs. KPMG’s revised estimates suggest that India could be home to a billion digital users by 2028 rather than the earlier projected 2030 timeline. Furthermore, it also highlighted that the M&E sector has been affected but to varying degrees– outdoor entertainment formats (films and events) and traditional media (print and TV to some extent) have been badly impacted as people stayed indoors and advertising spends dried up. Digital advertising, OTT and gaming fared much better, with massive spikes in digital consumption during the lockdown across geographies and socio-economic classes. “Digital advertising spends are now set to overtake those on TV by FY21, which is an important milestone and turning point in the evolution of M&E in India,” the report stated.

The distinction among segments of M&E has become more pronounced with the experience of the lockdown, Satya Easwaran, partner and head, Technology, Media and Telecom, KPMG India said. “Marketing spend has moved perceptibly towards digital media and away from traditional segments like print, radio and to some extent TV. A greater reliance on subscription and other paid options as well as the development of a credible digital business model is going to be inevitable for these traditional media segments,” he added further.

Moreover, the report suggested that organisations face a multitude of challenges and competing priorities but based on a survey of CXOs conducted by KPMG in India, customer focus and revenue growth are expected to drive digital-first initiatives over the near term within organisations, with cost reduction also emerging as important to traditional media segments.

For Girish Menon, partner and head, Media and Entertainment, there will be a deeper integration of digital technology across the M&E value chain – from content production to distribution. “Technology adoption could however face some challenges in terms of skill development and the shift to a digital-first mindset but will result in operational cost savings and potentially lower lead times over the longer term,” he explained.

Read Also: Google partners with Zoho, Instamojo, Dunzo and Swiggy to help small and medium businesses go digital

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